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I have a leave calendar list which users can only see their created by list items, however I need for the department managers to be able to see the employees in their departments leave items in that list too.

Is this possible?

How do I go about this?

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SharePoint default item level permissions from List settings > Advanced Settings will not work for your requirements.

You will have to use custom item level permissions. You have to list item break permission inheritance & then grant necessary permissions on item creation/update.

You can use Power automate flow which will run on item creation/update (as per your requirements), break permission inheritance & then grant necessary permissions.

Check this thread for more detailed steps and reference links which might help you: Restrict user access

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